Eurogroup agrees Lithuanian draft budget not as risky as EC believes

Elta EN

Tuesday, November 24, 2015

The Eurogroup, which has discussed the European Commission's (EC) recent assessments of 2016 Draft Budgetary Plans (DPBs) of the Eurozone member-states, expressed doubts about the EC assessment of the Lithuanian economic cycle

The Eurogroup was very positive about tax administration improvement programmes carried out in Lithuania and the country's plans to continue these measures in 2016.

In its assessment of the 2016 DBP of Lithuania, the EC also expressed an opinion that there exists a risk of deviation from the structural general government balance indicator and proposes that measures be taken so that management of public finances continues to meet the provisions of the EU Stability and Growth Pact. The EC also emphasizes that such a conclusion was formed before taking into account the effect of the tax administration reform being implemented by the Government. The EC also notes that recently in Lithuania a number of measures have been put forward to strengthen tax administration; in particular, the EC highlights a better VAT collection measure to identify risky transactions between business entities introduced in mid-2015.

The EC in its conclusion also emphasizes that the 2016 DBP of Lithuania foresees reduction of the tax burden on labour. It is done by increasing the non-taxable income rate to improve the financial status of low-income individuals, the Ministry of Finance of Lithuania said.

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